‘Good Cop’ Beats ‘Bad Cop’ in Origination Training

Upbeat information about new rules helps originators. Image: Fotolia

People get little value of attending a training session when the content is presented in such a way that it instills fear rather than confidence.

Compliance courses provided by Indecomm are structured to give the mortgage originators just the things in the regulations that they need to know. There are also a lot of items in the rules which are only applicable to the compliance officer or to senior management and originators can skip these, says Alice Alvey, senior vice president, Indecomm-Mortgage U.

Attorneys designed lot of current compliance training content being and it may fail to resonate with originators, she says. Training needs to avoid a negative message.

Indecomm’s content focuses on what is applicable to their daily jobs. “Good compliance is just simply great customer service,” she adds.

Right now, the hot topic for training is preparing for the qualified mortgage rule implementation. “We are surprised how many companies have not even started talking to their originators about what is QM.

“The compliance people are running around like the planet’s going to blow up and the originators are going, 'What’s going on? Are my applications going to be different’” after QM goes into effect? Alvey says.

The application process will likely remain the same. A loan Desktop Underwriter approves and the lender processes correctly is still likely to close, she says.

People must be comfortable with what will be happening. That is the message Indecomm is trying to get out in its QM training.

A QM training course should avoid causing the originator to worry about the customer suing them if the loan goes into default. Originators need to be happy and confident so they can go out and sell, she says.

Trainers should avoid delivering a “fear” message to originators when companies do QM training. The management team can discuss the issue in that way, but originators need to remain confident, she declares.

QM training does need to emphasis compliance but it needs to be done in the scope of how the originator communicates with the customer. For example, originators need to ask themselves what they need to be more mindful of as they discuss income with the customer.

Experian has upgraded its Credit Educator service to create a more confident borrower by adding a score change simulation component.

Credit Educator teaches the consumer about their credit report and items about what the codes mean. When it was introduced the goal was to make consumers more informed and able to make better financial decision.

The program remains a one-time session. Adding the score simulation will extend the length of the call but the company will still remain on the phone with consumers as long as they need.

The score simulator provides specific examples of actions which may improve a consumer’s score. Experian is very careful to let them know that there is a lot of variability in the scoring process and there are no guarantees, says David Proctor, vice president of marketing.

Experian’s staff takes the client through some scenarios, such as they have some extra cash, and what would the effect be if pay down or pay off a certain trade line?

Or if the originator told customers they might fail to qualify for a loan based on their score or they are getting a higher rate based on their score, Experian can walk them through a situation and provide specific actions they could take which might increase their score, he says.

This kind of training program broadens the relationship between originator and consumer, he says. It allows the originator to say to the client, ‘Here is some extra education about credit that helps you understand why you qualify for one product versus another.’ The information in the session helps the consumer to understand the benefits of maintaining a healthy credit profile, which also helps show the lender they are willing to keep their loan performing, Proctor says.

It shows consumers that the originator is interested in helping them on a holistic basis, and the originator is interested in helping them with more than a single transaction.

Clients walk away with insight on how to improve their credit standing and qualify at a later date even if they fail to qualify for a loan just then.

Experian has analyzed the effectiveness of Credit Educator. Those who came through the training improved their credit score by 21 points over a 12-month period, Proctor says.

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